Brexit Update 17th August 2018

Top 3 developments

No-Deal technical paper list leaked

Warnings over not reaching a deal stepped up

Skills Shortage Fears

UK Update

Technical Paper List Leak

The government is to cover 84 areas of British life in technical papers released from next week according to a new leak seen by Buzzfeed. According to the news source, the papers will cover sweeping areas including financial services as well as more specific areas prepared by government departments. Areas covered in the technical papers include aviation safety and security, data, telecoms and procurement amongst others. The Department of Exiting the European Union (DExEU) said it would not comment on the leak, but that paper would be published in August and September and would be available centrally through the gov.uk portal.

With less than two months to go until a final withdrawal agreement is due to be concluded, the technical papers are likely to come under intense scrutiny from Parliament when it returns next month. The Prime Minister has stood by her belief that “no-deal is better than a bad deal”, whilst others believe no-deal is the worst deal. If the Government fails to secure EU backing for the Chequers framework for a future relationship, it is likely the Government will need to change tack. This could include looking again at current EU agreements with third states, or as a matter of last resort preparing to leave without a deal, which is opposed by most MPs.

Warnings of No-Deal stepped up

Foreign Secretary, Jeremy Hunt, has warned of the ‘significant’ impact a no-deal Brexit would have on the UK in the short term. Speaking in Helsinki, Hunt went on to say that there is no guarantee that a deal will be made, and that everyone should prepare for a ‘chaotic no-deal Brexit’, before following up his remarks saying that the UK would ‘find a way to get through it’ and ‘ultimately thrive.’ The remarks, which Hunt has repeated across various European cities, looks to be aimed at ramping up the possibility of a no-deal in member states to illicit pressure on EU leaders to make the Chequers Deal workable.

This was followed by Business Secretary Greg Clarke, a strong ally of Theresa May, warning of the ‘significant and lasting economic harm’ to families across Europe if a deal is not achieved. He went on to ask the European Commission to respond ‘positively and constructively’ to the Chequers White Paper. Failure to do would likely play into the hand of Brexiteers pushing for a ‘clean break’ which would include trading on WTO terms. A possibility seen as increasingly likely by credit agency Fitch. Pressure on the Commission and warnings to member states are therefore likely to continue until September 20th at the earliest, when Theresa May will address EU leaders in Austria – seen as one of the last opportunities to shape the EU’s position ahead of the October EU Council Summit to sign off any agreed deal.

Expats challenge Brexit vote

The UK in EU Challenge group, made up of British expats living in France, Italy and Spain, have mounted a High Court challenge to the 2016 EU Referendum result. The move comes after the official Vote Leave campaign was fined £61,000 for breaching Electoral Commission rules, with the Leave.EU campaign, led by Nigel Farage, also incurring a fine of £70,000. The group mounting the legal bid is seeking judicial review of the two Leave campaign groups and believe any unlawful behaviour should nullify the result of the referendum. The case will be heard by a High Court judge, who will decide whether it has grounds for a full review.

Skills shortage fears

People migrating from across the EU to the UK has dropped by 86,000 over the past year – the largest drop since records began. The drop sparks further concern for businesses and public services facing skills shortages, which are said to have forced up wages an average of 2.7% across sectors. Whilst the wage increases are a good sign for workers, companies have warned of the impact low immigration has had on filling vacancies. With the UK currently at only 4% unemployment, its lowest level since 1975, the Chartered Institute for Personnel and Development (CIPD) has said 40% of employers had more problems filling vacancies than they did last year. This includes IT, transport and construction industries which traditionally rely on non-UK labour forces to fill roles.

Ta-riff in perceptions

The UK is provisionally preparing to terminate 72 of 114 EU tariffs after it leaves the EU according to the Times. The Department of International Trade (DIT), headed by Brexiteer Liam Fox, are preparing to establish trade agreements with third states after 29th March 2019, meaning dropped tariffs open possibilities across sectors for free trade agreements. The release of the plan is likely to be seized upon by the European Commission who have talked of the threat of an independent UK operating an independent trade policy but operating within the free market for goods – as set out in the Chequers Plan. Labour’s Shadow DIT Secretary said, “the backdoor argument shows precisely why the EU is reluctant to allow the UK to become a tariff collector on their behalf”, a former EU negotiator said, “the potential for people to distort the systems of the EU and UK are enormous”.

Don’t copy us! Says Foreign Secretary

Jeremy Hunt, the Foreign Secretary, has said that Denmark should not follow the UK out of the EU, describing the challenge as “divisive and difficult”. The UK wanted a “strong EU” he went onto say. The position reflects Government policy to support the EU and its continuation after the UK leaves. 2017/18 has reflected a particularly challenging time for the EU, with many EU states holding elections with nationalist parties taking significant proportions of the vote. However, support around the EU is said to be galvanising in response to the UK’s exit, given the difficulty of the operation.

EU Update

*Cough* *Cough*

EU officials have warned that over 100 medicines will be unavailable for EU27 citizens after Brexit if manufacturers do not step up preparations to meet EU regulations for their use. Pharmaceutical company AstraZeneca has spent £40 million in preparation for a no-deal Brexit, bringing their products in line with EU regulations, including by setting up a parallel operation in Sweden. When the UK leaves the single market and customs union, market access will depend on any future deal agreed. In preparation for a no-deal, many companies are establishing themselves in other EU states to allow them to continue to operate across the EU in any circumstance.

The Chancellor of the Exchequer is speaking now to outline support measure to help the economy through the COVID-19 crisis. Measures include a £330bn package of Gov backed loans for businesses #COVID2019pic.twitter.com/83gAWBzqch

Providing better broadband has been a key Governmental commitment of late, and this announcement is a sign that this Government is ready to build the infrastructure to future-proof the UK economy. #Budget2020pic.twitter.com/H8Rb9VFPVD